Paper makers attack DTI

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REPRESENTATIVES of the British paper industry criticised the Department of Trade and Industry yesterday for failing to respond to a German threat to UK producers that recycle waste paper.

German legislation has encouraged the collection of vast quantities of waste paper. According to the British Paper and Board Industry Federation, this has allowed German producers to obtain raw materials at zero or even negative cost, putting their competitors at a serious disadvantage.

Dermot Smurfit, the federation's president, told the House of Commons Trade and Industry Select Committee that the German legislation was 'very, very damaging for UK business'. Peter Williams, chief executive of David S Smith, said his company was the UK's leading waste-paper firm, but it was losing money on a pounds 200m business. The UK recycled paper industry was in 'serious crisis', he said.

Mr Williams said that despite many representations to the DTI, 'We are at risk of being dramatically out of step with the rest of Europe'. The Dutch had found a solution to the German threat, and the French and the Belgians were also responding, he said.

Jeremy Bartlett, the federation's director general, said the paper industry, which employs 30,000 people and exports pounds 800m of goods to other European Community countries, had seen little evidence of the DTI support proclaimed by Michael Heseltine, President of the Board of Trade. He said the industry came under an 'extraordinary' DTI section that dealt with textiles and retailing.